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One reason Netflix can spend so much on original content
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This week we will see the return to the fictional town of Hawkins, Indiana, in Netflix's original series "Stranger Things." - photo by Jared Whitley
This week we will see the glorious return to the fictional town of Hawkins, Indiana, in the so-long-ago-it-feels-fictional year of 1984 with the premiere of "Stranger Things," season 2. Last years nerd-stravaganza has captured more attention than any other Netflix-produced show including a bundle of awards to go along with it and fans are hoping this new season will turn us even more upside down.

But where next year is concerned, Netflix has a lot more planned than just "Stranger Things," season 3.

Last week Netflix announced that it was spending upwards of $8 billion on original content for 2018.

There are a variety of reasons it might do this. One is to stop the damage of losing its access to other companies' content, notably Disneys, which is moving the Mouse House to its own streaming service. Another is buzz and awards, which give the service legitimacy as it competes with traditional entertainment sources. Also is licensing, because Netflix doesnt have to renegotiate its own program rights in every country.

But for as much attention as this kind of move garners for Netflix, people seem to be missing the biggest reason for it to make its own shows.

Product placement.

When content creators prominently make products a part of their storyline, or otherwise draw attention to them, this is called product placement advertisement inside your entertainment. Everyone does this movies, TV shows, YouTube channels, even entertainment columnists for midsize regional newspapers. (Email me if youre interested in this exciting opportunity! This is a joke, my editor has made me add.)

Product placement has been going on for decades. Soap operas got their very name because they were underwritten by fast-moving consumer goods like, for example, soap. Everything with a superhero in it reminds you to buy merchandise with that superhero on it. Each Transformers movie is basically "a GM ad in disguise, according to an NBC News story. Chris Pratt's character in Parks and Recreation wore a T-shirt for his band Mouse Rat, which you can buy on the show's network website, nbc.com.

But product placement is more important than ever, given how easily people can now skip the advertising that has always paid for their free entertainment. Moreover, piracy services tend to conveniently not advertise in the shows they bootleg, so product placement could turn the liability of piracy into a huge advantage. Thats the whole point of advertising: Get your product in front of as many eyeballs as possible.

And who would benefit the most from advertising without traditional advertising but an entertainment service that brags about saving you from ads?

To return to "Stranger Things," a major plot point is that the character Eleven recharges her psychic powers using Eggo waffles. Now Kellogg insists that the plot point is a "happy surprise" and that "Netflix doesn't offer any paid placements," but that seems ludicrous. We know, for a start, that the company partnered with Netflix for this years season 2 Super Bowl ad that led with an Eggo ad from the 1980s.

Moreover, a trail of bread crumbs (or waffle crumbs) of product placement is littered throughout the rest of Netflix's shows. Bill Gates' company Branded Entertainment Network even admitted to paying between $50,000 and $500,000 for mentions on single episodes of Netflix shows.

In "House of Cards," protagonist Frank Underwood (Kevin Spacey) unwinds after a hard day of political shenanigans by playing video games PlayStation video games.

Theres one scene where hes too frustrated to play, so he just leaves up the loading screen and, even more importantly, the PlayStation logo. In another episode, he interrupts the story to ask a fellow member of Congress if his son plays the PS Vita.

And, oh, as a striking coincidence, Spacey did voice work for "Call of Duty: Advanced Warfare" (available on PlayStation 4). What a "happy surprise!"

Netflix has also been very obvious about leveraging its marijuana-centric show Disjointed (clever!) to promote its own line of pot products. Yes, thats right: Netflix created original content specifically to advertise drugs.

Product placement is something we all need to get used to seeing. Making movies and TV shows costs money, and product placement is a way to revitalize advertising revenue that has dried up. If people binge-watch a whole season at a time, that advertising is more likely to influence behavior.

So leggo my Eggo.
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